Citigroup: $45 billion TARP money goes toward loans

Citigroup Inc said on Tuesday that the committee overseeing its use of $45 billion of taxpayer money had approved the use of nearly all of that sum to make loans.

The New York-based bank said the committee had approved $44.75 billion of lending initiatives as of March 31, including $8.25 billion for new programs in the first quarter.

Citigroup said the new loans included $5 billion to municipalities, universities and nonprofit hospitals; $2 billion to help fund small and midsized businesses; $1 billion for residential mortgages; and $250 million for auto loans.

Many state and local governments and agencies have struggled with falling tax revenue as taxpayers spend less and suffer investment losses. Disruptions in credit markets have also caused borrowing costs to rise for many borrowers.

Citigroup said it had extended more than $200 billion of credit in the United States since October, when it got its first $25 billion infusion of bailout money.

The bank got another $20 billion in a bailout the following month.

Banks such as Citigroup do not lend the actual TARP infusions. Instead, they borrow cheaply from other sources and keep the TARP money on their books to bolster capital.

Citigroup is one of 19 banks to recently undergo federal stress tests of their ability to weather a deep recession.

The government told it to raise $5.5 billion, one of 10 banks ordered to close capital shortfalls. Citigroup plans to soon conduct an exchange of preferred stock into common stock, which could leave the government with a 34 percent stake.

(Reporting by Jonathan Stempel in New York and Anurag Kotoky in Bangalore; Editing by Lisa Von Ahn)

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